[MGSA-L] Can the digital revolution rescue Greece from economic crisis?

[June Samaras]

Use the link to see the video

http://www.cnn.com/2012/07/13/opinion/keen-greek-entreprenuers/index.html

JS
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Can the digital revolution rescue Greece from economic crisis?

By Andrew Keen, Special to CNN
updated 10:58 AM EDT, Fri July 13, 2012


    Keen: Greece's digital future is surprisingly encouraging
    Greece is wracked by the most serious economic crisis for at least a century
    Yet, amidst all the despair, there is a rebirth going on in Greece
    The irony of this renaissance is that it probably wouldn't have
happened without the crisis

Editor's note: Andrew Keen is a British-American entrepreneur and
professional skeptic. He is the author of "The Cult of the Amateur,"
and "Digital Vertigo." This is the latest in a series of commentaries
for CNN looking at how internet trends are influencing social culture.

Athens (CNN) -- Most people travel to Greece to look at antiquities.
But I've spent the last few days in Athens sightseeing the country's
digital future. And what I've seen is surprisingly encouraging.

The future isn't hard to excavate in Greece. Indeed, immediately upon
arrival at Athens airport, travelers are confronted by spread of slick
advertisements for a global bank.

"The future is full of opportunity. Be part of the future," one of
these advertisements advises.

"Age will be no barrier to ambition," another promises.

"Even the smallest business will be multinational," a third guarantees.

But today, in a Greece wracked by the most serious economic crisis for
at least a century, the truth about the country's economic future is
mostly the opposite of these advertisements.

In Greece today, the future is mostly characterized by fear rather
than opportunity. The problem is that this small country doesn't
appear to be part of anyone's "future." Increasingly peripheral, even
to the euro crisis, Greece is in danger of drifting back into its dark
20th century past: back to the self-destructive politics of
anti-capitalist violence and ethnic hatred; back perhaps to the
drachma, to economic autarky and perhaps even to a financial
apocalypse equivalent to the Great Depression.

Euro crisis: In-depth

In Greece, the "smallest businesses" in an economy still dependent
mostly on tourism, are about as multinational as the crumbling remains
of the Acropolis. In this classic Southern European gerontocracy in
which at least 50% of young people are unemployed, age actually mostly
represents an impenetrable barrier to ambition.
The irony of this renaissance is that it probably wouldn't have
happened without the crisis
Andrew Keen

And yet, amidst all the despair, there is a rebirth going on in
Greece. It's a digital renaissance and it's being pioneered by a new
generation of talented young Internet entrepreneurs who are trying to
reinvent not only the Greek economy and society, but also Greece's
role in today's global economy.

The irony of this nascent Greek digital renaissance is that it
probably wouldn't have happened without the economic crisis. In
pre-crisis Greece, most Greeks grew up wanting to be public servants.
But now that the old clientist state cannot offer lifetime sinecures
for university graduates, young Greeks coming out of university now
have little else to do except invest their labor in start-ups.

"There's no other option," Tasos Frantzolas, the founder of Soundsnap
who splits his time between New York and Athens, told me about this
entrepreneurial renaissance in Greece. "People of my generation
recognize this."

John Doxaras, the CEO of Warp.ly who studied physics at Cambridge
University and who now divides his time between Athens and San
Francisco, agrees with Frantzolas. Given the crisis, Doxaras -- a
young man who is already on his third start-up -- believe that young
Greeks have "nothing to lose" and are "willing to take a risk."

There's a "big opportunity" in Greece, Doxaras told me because --
given the relative insignificance of the local market - start-ups have
to be global, both in their organization and their market. Warp.ly,
for example, which offers big brands tools for mobile marketing, has
its biggest client in Kuwait and, of its 22 fulltime staff, four are
in the U.S., six in Europe and 12 in Athens.

In the Greek digital economy, even the smallest business have to be
multinational.

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Christina Plakopita concurs with Doxaras. Plakopita, a 28-year-old
woman who has degrees in economics and real-estate development from
London and Columbia universities, came back from the US to Greece to
start-up and run Netrobe, an iPhone app designed as a virtual closet
for young fashionistas which already has 40,000 users.

People said I was "crazy" to come back to Greece, Plakopita, who
returned to Athens to live with her parents, told me. "But it was a
great decision," she explained, because digital is "booming" in Greece
and it's an ideal market to "think global and act local."

Like Doxaras and Frantzolas, Plakopita's confidence in the digital
Greek rebirth is rooted in the wealth of human talent in Greece. I
think they are correct. Having spent the last few days in the
invigorating company of many Greek start-up entrepreneurs, I have been
struck with their vitality, intelligence and ambition.

>From early-stage collaborative workspaces like CoLab and 123p, to
entrepreneurs from promising local start-ups like Taxibeat, Radiojar,
Parking Defenders, Dailysecret, Joolmaworks, CrowdPolicy.org and
Cookisto, it is self-evident that there is something very promising
brewing in this nascent Greek digital economy.

So what could go wrong with this budding digital Greek renaissance?

The biggest problem, of course, remains the oppressively bureaucratic
Greek state that, in spite of the crisis, continues to be a major
obstacle to entrepreneurial innovation. "Failure in Greece in
penalized," John Doxaras told me about a system in which entrepreneurs
can end up in jail if they bankrupt their companies. And every Greek
start-up entrepreneur I met complained bitterly about arcane and
ever-changing bureaucratic regulations that make setting up and
running a company frustratingly complex and time-consuming.

Greeks pull money out of country's banks

As Stavros Messinis, the co-founder of CoLab told me, Greece remains a
"tough environment" for entrepreneurs. What's missing, Messinis
explained, is a both a legal and social acceptance of the idea of
failure. There's no "culture of forgiveness" for business failure in
Greece, Messinis explained. And thus most Greeks remains terrified of
failing, even though failure is the unavoidable norm of even the most
successful start-up ecosystem.

Then there's the broader cultural challenge of rewiring Greek minds
for the digital age. As Warp.ly CEO Doxaras explained, most Greeks --
even its younger generation -- don't "get" the idea that Greece, if it
wants to compete in the 21st century global economy, has any other
option but to become a start-up nation like Israel.

Oddly enough, a possible Greek exit from the euro is seen by many
entrepreneurs as a much a blessing in disguise for their businesses as
a catastrophe. "If you sell abroad you will get rich overnight," Fotis
Evagelou, the CTO of Joolmaworks, told me. While CoLab co-founder
Stavros Messinis acknowledges that any start-up with clients overseas
would benefit from the inevitable devaluation of the local currency
that a Greek exit from the euro would trigger.

But does Greek economic failure really equal entrepreneurial success?

No, it's not that simple. Messinis cautions that the return of the
drachma would be "superbly negative" for entrepreneurs in the
short-term, with exchange controls, massive layoffs, riots and empty
supermarket shelves. John Doxaras even warns that a euro exit might
result in significant power cuts thereby cutting off local digital
companies from their lifeblood -- access to the global network.

Yet in spite of the danger of a complete economic meltdown, the future
remains full of opportunity for Greece's young digital entrepreneurs.
It won't be easy, of course. But a country best known for its
antiquities might turn out to be a key hub for radical innovation in
our digital economy.



-- 
June Samaras
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E-mail : june.samaras at gmail.com